There are No Shortcuts in the Journey to Data-Driven Nirvana
It’s relatively easy and painless for corporate leadership to simply decree from on high that the company shall be “data-driven” from this point forward. However, bringing the organization and workforce around to data-driven thinking is a tough nut nobody has fully cracked yet. Organizations that are ahead of the curve with data analytics efforts – and are showing the way for everyone else – still admit that they are struggling with the human side of things – getting buy-in, encouraging analytical thinking, and aligning incentives and workflows accordingly. The bottom line: there are no shortcuts on the journey to becoming an analytics-driven enterprise.
That’s the key takeaway from a recent survey of 564 high-level executives in large organizations, sponsored by EY and conducted by Forbes Insights. I had the opportunity to help design and author the survey as part of my work with Forbes Insights.
About 10% of the executives represent what could be considered leaders in data analytics, defined in our survey as those who use data analytics in their decision making “all of the time” or “most of the time;” indicate that their enterprises are “advanced” or “leading” in applying data analytics to business issues and opportunities; and report a “significant” shift in their company’s ability to meet competitive challenges.
The survey report explored what it is this 10%, or “The Best,” are doing differently than most organizations. For starters, analytics is central to business strategy among this leadership cadre. A majority (54%) of executives with leading analytics organizations report that their analytics strategy is well established and central to their overall business strategy, versus about one in 10 of respondents in the lagging or learning enterprises. For leaders, analytics is 24×7. For a majority of the top 10%, analytics is an ongoing activity embedded into their jobs. Only 19% of the rest of the executives in the survey use analytics all the time throughout their workday.
In addition, these leaders already gain competitive advantage from data and analytics. Executives in the top 10% of enterprises report seeing tangible business results from their analytics efforts. The use of data and analytics created a noticeable shift in their company’s ability to meet competitive challenges for all of the executives in leading organizations. Only 17% of the remaining respondents, or “The Rest,” report such results.
One of the most important obstacles to enabling organization-wide analytics consumption is alignment between analytics delivery and business requirements. The leading 10% are dramatically ahead of the rest of their peers in terms of aligning people and analytics within their organizations. Fifty-six percent of them say that enterprise, department and lines-of-business data and analytics groups exist and are well aligned, compared with just 13% for the rest of the organizations. The difference is significant, but it still means that almost half of the top 10% are behind in this area, showing that even at the highest-performing companies, much remains to be done.
As part of the research, I had the opportunity to speak with Scott Filiault, vice president of information management and analytics at CIGNA. “Analytics has to be a strategic imperative,” he said. To move his organization’s efforts forward, Filiault’s team “laid out the case for change and made sure our senior leaders were all on board with it. We made sure it helped us achieve our high-level goals.”
To help accomplish this, leading enterprises also designate leaders to guide their initiatives. Close to two-thirds of executives in the top enterprises indicate they “have a dedicated C-level executive—a chief analytics officer—overseeing their data and analytics programs and engagements.” In contrast, only two in five of the developing organizations have a designated CAO. A majority of leading enterprises also have a chief data officer, versus about one-third of the rest of the respondents.
Leaders have advanced competencies in the people management aspect of data and analytics. In 39% of leading analytics organizations—versus 12% of the rest—analytics skills are “recognized, effective, efficient, monitored and clearly used to support decisions.” More than one-third of the top 10% also have well-defined competencies for each role and level, along with robust training programs that address potential skills shortages.
Leading enterprises provide employees latitude to act on analytics opportunities and insights, but even the most advanced organizations put limits on this capability. About one-third of the top 10% afford their employees complete discretion and autonomy to pursue analytics opportunities, versus 13% of the rest. However, at least 42% of the leaders grant some latitude under management tutelage.
“The Best” also provide financial incentives and training to spur an analytics-driven consumption. They understand the importance of motivation to make analytics efforts stick. Forty percent of them have aligned incentives to desired change from analytics, compared with 23% of their peers. By far the most popular incentive is financial. A majority of the top 10% of enterprises award bonuses or rewards for new recommendations derived from insights. More than two-fifths also offer greater opportunities for promotion and advancement to individuals. Only about one-third of the rest offer such incentives.